from the more-smoke-and-mirrors dept

For decades now, we keep hearing various "copyright intensive" companies whining to the press and politicians about how the "biggest threat" they face is continued copyright infringement. We hear about how it's undermining not just their business, but entire economic sectors, the basis of capitalism and the fundamental rule of law. Copyright infringement, we are told, is one of the largest risks to the economy and society that you could possibly imagine. We've long questioned the validity of those claims, especially since history has shown that the industry cries wolf fairly frequently and has always been wrong. Most famously, of course, the MPAA's Jack Valenti told Congress that "the VCR is to the American film producer and the American public as the Boston strangler is to the woman home alone." That was in 1982. In 1986, the home video market -- which the VCR created -- made more money for the MPAA's studios than the box office did. It's tough to believe the "threat" claims when they're always wrong.

But, the "copyright intensive" industries just keep on making those claims, and there's always some in the press and among elected officials who either don't know or don't care about the past (or technology or reality) and automatically believe those claims. They just assume that of course copyright infringement must be a huge threat because these companies say so.

A new study, however, found a pretty good way to evaluate the reality of that threat. Jonathan Band and Jonathan Gerafi realized that a good "independent" third party to evaluate the risk and threat of copyright infringement would be investment analysts. Their only stake in the game is whether or not the company is going to do well or poorly. If the perceived risk and threat was real, they'd certainly be letting everyone know. So, Band and Gerafi have produced a new research report studying equity research reports issued over the last quarter for eight of the top companies in the so-called "copyright intensive industries."

The choice of companies is interesting, because all eight are among those that regularly scream the loudest about the "threats" of infringement: Sony (owner of Sony Music and Sony Pictures), Vivendi (owner of Universal Music), Disney, Viacom (who also owns Paramount), Microsoft, Adobe, Pearson and Reed Elsevier. If you're keeping track, that's basically three of the largest movie studios, two of the largest music labels, two of the largest software companies and two of the largest publishers. If copyright infringement was really this existential threat they've all been screaming about, certainly it would show up in the equity analysts' reports, right?

Well, let's take a look at the findings:

None of the 14 reports for Reed Elsevier and 18 reports for Pearson identified copyright infringement as a risk factor.

Only 13% of the 15 reports for Sony and 22% of the 23 reports for Vivendi mentioned copyright infringement as a potential risk.

Just 8% of the 26 reports for Viacom and 27% of the 26 reports for Disney referred to copyright infringement as a risk factor.

26% of the 19 reports concerning Adobe and 41% of the 27 reports concerning Microsoft identified copyright infringement as a risk factor.

Cumulatively, only 19% (32) of the 168 reports referred to copyright infringement as a possible risk; 81% did not.

And, in case you were wondering, the reports that didn't list copyright infringement as a risk (i.e., nearly all of them) did list out a variety of other factors. It wasn't just a case where they weren't covering risks at all. They carefully looked at the market, and didn't seem to think infringement was a real risk at all.

And, it's important to note that since these are all public companies, the execs at those companies often spend a lot of time "educating" the analysts about the state of their business. In fact, in the annual reports for six of the eight companies listed, the companies themselves do list infringement as a major risk. It just looks like the analysts looked at the detail and simply didn't see any legitimate threat in most of the cases.

Reader Comments

But did they consider youtube? If we take big content's right to charge for youtube content that they don't hold copyright on, how much would that change their economic outlook? It would be pretty bleak if they could not steal revenue from people singing songs that are in the public domain and similar things.

Re: There will always be these claims @ "someone who just comes along, out of the blue"

Ah, embiggening my rep! Your comment has no other purpose than empty yapping at figments of your own imagination, simply because you have a yapper but no substance.The most influential, the most commented-at, the most mocked! And the only commenter honored in SONG!http://en.wikipedia.org/wiki/Out_of_the_Blue

Re: Re: Re: There will always be these claims

@ "DannyB"At some point, even lacking critical thinking, people must recognize a pattern.You list a few gadgets as if proves something.

NapsterIsohuntHotfileand soon, Kim Dotcom and Megaupload.

Those are court proving firmly that your piratey notions about free content, "sharing", indirect income from advertising with infringed content, "new" ways of distributing someone else's content, and so on are all actually illegal. I agree largely with those cases sheerly on basis of common law: "I made it, therefore I own it, you do not". At best, enjoying the work-product of someone else without rewarding them even a little is just sleazy second-handing. And that's the true "pirate" philosophical position: you don't have even one real leg to stand on, just try to claim stealing is good.Where "I'm a pirate! You can't stop me!" is one of the more thoughtful fanboy positions.

So take that, pirates! You haven't yet killed the producers of the CRAP that you consume!

To trumpet that evil Hollywood, the producers of content you kids so desperately desire that you steal it, are doing okay despite piracy is just continuing your wacky implication that piracy needn't be limited, and that's simply not true. In any case, the creators have the total of the right because they made the content:

The societal deal is that consumers pay for the content: there's NO other deal even possible, but you little pirates claim you're entitled to consume it, and as here, that your piracy doesn't hurt, even helps, and you claim that because simply want to excuse your own thefts.

In fact, it's you consumers who enable Big Content. If they depended on me, they'd be out of biz by February. You kids -- since you say you're not harming and even helping promote -- are actually funding Big Content. You is your own enemy.

Now listen, kids. Rail at MPAA and RIAA for not giving rewards to creators, for getting too much money too easily for crap, for increasing laws and regulations that clamp down on convenience, or even justify your stealing because it's from The Rich, but don't excuse as NOT stealing or try to claim there's no harm.Keep perspective, kids: Megaupload is not the leading edge of new content delivery modes, it's just trailing edge of theft from the old producers who are well justified in stomping out piracy.

@ "Gwiz":Your comment has no other purpose than empty yapping at figments of your own imagination, simply because you have a yapper but no substance.You aren't even honest enough to attribute that to me! But for my text, you're speechless.

Is this going to start yet another of your substance-free commenting trying to get me to comment on your lack of substance while you claim that I must say something before you can go?

You pitiable nitwit, just SAY SOMETHING. ANYTHING which someone could conceivably find a point in to disagree with.

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'six of the eight companies listed do list infringement as a major risk'

that's it then! more bullshit evidence revealing the exact opposite of what these industries/companies always claim! that's gotta be more than enough to get the politicians falling over themselves to get new laws in place that will wreck lives and imprison people, just because they are human and humans share things!!

The copywrong industry now suffers from the same problem as the government and the NSA. They've lied so long no one believes them anymore.

The movie industry has had consecutive banner records, block buster years, with one break in between that wasn't a block buster year. That one was something like 5% or so under being a block buster. It's not piracy that is killing them at all or there would not be banner years.

The music industry is a victim of it's own policies. Especially having turned all it's management over to politicians and lawyers rather than artists who understand what the artist is going through and how to fix that. You can't run an industry with a club and then not expect people to abandon you.

The copyright industry has gotten it so wrong that its become the copywrong industry. Beyond those with greedy hands stuck out, no one else much cares what they demand and want. Its not applicable in most peoples lives as something they need to pay close attention to. It shows up as constant legal threat letters and court cases.

A good law doesn't need enforced because everyone thinks it is wrong. A bad law is ignored no matter how many are jailed or taken to court.

You always harp on that Valenti quote (and seriously, it's getting old...don't you have any new material?)

The irony is that he probably wasn't that wrong. He was just premature. His assumption was that the VCR would make movie piracy as easy as the Internet does now (or perhaps a little easier, since it's still a little clunky thanks to anti-piracy efforts keeping it slightly underground).

Let's face it, for the average home user VHS copying was never easier than "a moderate pain in the ass." You needed two collocated VCRs (expensive initially) and later some way to defeat Macrovision. Plus it still took two hours to copy a two hour movie without special equipment. Then there was the degradation of each copy in quality. Then there was the fact that you had to physically transfer that copy to someone. So piracy took some dedication. Not so much anymore.

Music piracy has beaten the hell out of the recorded music industry in a way that home taping never could for the same reason. Movies are next, especially as bandwidth continues to increase. It would not surprise me if Valenti's sentiment were vindicated (if not his specific prediction about the VCR).

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Uhhhhhhhhhh it is, and has been, INCREDIBLY easy to pirate movies and TV shows since the early 2000s.Even a moderate DSL line can download a 700 SD rip of a movie in a night.Comparing fat cats loosing money to literally violently raping a women in offensive in so many ways.And as the comment just above yours mentioned, if "easy to piracy" was truly a huge problem, they wouldn't be posting record years over and over again.

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Yes. When the RIAA had a monopoly, they made billions. When they lost the monopoly, they lost money. It's not rocket science. People paid more for discs than necessary because the RIAA had control of the means of distribution.

Now they compete with the entire internet and that scares them. They aren't innovators, they are parasites exposed for what they are.

They wanted Kim Dotcom in jail because he was a competitor. DJs get harassed for selling their own CDs. Independent artists get less platforms to work with because of laws that stifle free speech in the name of copyright.

And law enforcement... Oh, sorry... "National Security Agents" waste time and resources being the private police force for companies that make billions instead of actually doing something useful like going after real crimes.

So when you say they are losing money, I do believe you. Karma is coming to kick ass without bubblegum. I'll grab the popcorn.

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"Compete" is a strange word to use when one "competitor" needs to pay for their content and the other just takes it illicitly. I can have the cheapest taco stand in town if I don't need to pay for ingredients.

Tell you what, go ahead abd get the law changed to level the playing field so the RIAA/MPAA members no longer have to compensate artists. Then we will have a real competition.

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You're right, it is hard for independent artists and producers to compete when the RIAA/MPAA takes their copyrights and profits illicitly with one-sided contracts (Hollywood accounting, RIAA accounting).

You have things backwards though, we should have the law changed so that the RIAA/MPAA members actually have to compensate artists. Then we will have real innovation.

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What is likely to kill the labels is not piracy, but rather the competition opened because the Internet has made made collaboration, working with sound engineers, and self publishing easy for budding musicians. It has also enabled alternative financing models, like kickstarter, and you know what, this allow people to make more money on fewer sales because they are no longer supporting fat cat middlemen.

Re:

"Piracy" has always been a hobby of mine. When I bought my first VCR ($400 back in those days), one of the first things I did was go to the local video store and rent out "Star Wars" and another VCR. I was so happy to have my very own copy of "Star Wars" to watch whenever I wanted. I have been a dedicated "pirate" since that day. (I believe the first instance of Macrovision I encountered was on Disney's "Sleeping Beauty". My first stabilizer was Vidicraft's PlayRight. Those were the days...) I think my first DVD burner was in 2003.Anyway, it's a hobby of mine, something I enjoy. And it's no doubt saved me a lot of money too!

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Music piracy has beaten the hell out of the recorded music industry

But artists have never had that many avenues to connect with fans and make money. It's just that most musicians won't make dirty amounts of money anymore. Super stars still exist though and the good, lasting ones usually start without the help of the labels.

So piracy took some dedication. Not so much anymore.

And yet you had to spend several bucks to buy a blank media whereas today you don't have to. If I copied something back in the days I would most probably NOT buy the original as there has been money spent already. Nowadays it's quite the opposite. You find it, discover it as a personal like and still got the money to throw at the artist. Or at a physical CD if it suits you.

or perhaps a little easier, since it's still a little clunky thanks to anti-piracy efforts keeping it slightly underground

Really? It's easier to download infringing content than getting it officially. Usually. Netflix for one simply eradicated my needs to go for movies online to the point I'm assuming nowadays that if it isn't on netflix then it does not exist (I kid, I still check out for indie stuff). The sheer amount of older titles available are enough to keep you busy for life and the quality of newer releases (in terms of entertainment value) is pure crap in quite a lot of cases. Then there's the sheer high cost of movie tickets and the fact that the morons seem to be FORCING 3D content on us (I HATE 3D content so usually when there's a more high profile title I MUST watch I have to go to great lenghts to find a cinema that has the 2D version of it - Hobbit: Smaug is a good example. I had to drive 40 goddamn kilometers to go to the only fucking cinema that had it in 2D in the Metropolitan area of São Paulo - it wasn't even in São Paulo itself). So before whining on how easy it is to pirate go fuck yourself or provide easy access for fair pricing. (Noticed I got angry just thinking about the incident? Yeah, I did and that's why I avoid cinemas now).

You kids are fighting the battles Hollywood wants you to!

This continual focus on academic "studies" that "prove" piracy isn't harming the biz is actually FINE with Hollywood! So long as you're arguing not on Populist -- and popular -- class warfare grounds then you're only trying to justify stealing of empty entertainments without paying. It's not an honorable nor a supportable position. You even label yourself as "pirates"! What better BOX could evil Hollywood put you in?

And Mike yet again trotting out the Jack Valenti VCR bit actually disarms YOU rather than attacks Hollywood. You read that boiler-plate and stop thinking, just giggle to yourself about clueless idiots in Hollywood wanting to stop progress. (The remark itself may have been originally intended to be stoopid enough to stop thought.)

This is obvious to me so I've never written it directly, but as I've said many times and do above, oppose Hollywood on real grounds not that piracy is okay or even good. It's not. It's theft, whether you admit it or not. And Hollywood is NOT actually bothered by piracy, kids: it's a combination of making the product scarce by forbidden, and some other advantages of excuse to run to Washington for more powers, but in any case, so long as you're consuming the product, THEY OWN YOU. Yup, you is owned, kids.

Just take my advice (given here several times previously) and stop consuming the content. Try to make your own, no matter how feeble.

Because you're definitely losing the war, as the figures show! You've no right to call yourself a pirate if don't even think you're STEALING! Now, ship up or shape out, landlubbers!

Re: You kids are fighting the battles Hollywood wants you to!

You know, you might not have EVERY comment reported if you were something less of an asshole.

Calling us "kids," "pirates," or "fanboys" (or whatever other term you think makes you look clever) hasn't helped you much, has it? I'd venture a guess that there's not nearly as many "kids" on here as you think. I'm not sure who even uses the term "fanboy" anymore (other than you). It's to the point that if you comment, you can ABSOLUTELY count on it being reported.

You might want to consider another approach, because if all your reported posts aren't a signal to you that "it's not working," I'm hoping this comment will.

Re: Re: You kids are fighting the battles Hollywood wants you to!

@ AC: You know, you might not have EVERY comment reported if you were something less of an asshole.Umm, where are my comments on this topic censored? You may click to censor and think you've slain me, but it's just another fantasy, you piratey fanboy kid.

Listen, I'm HAPPY to be opposed by you piratey fanboy kids. You're pirates, and uncritical fanboys, and kids. I arrived here with generally pirate views, and Mike has shown me that I too "support copyright"! That may even be his intent: you don't know, just assume he's a fellow pirate.

My tactics have actually gotten me further than any AC: far and away the most influential here, notably less vulgarity and "Dark Helment" on the site (come to think of it, that's redundant), and Mike doesn't natter about selling T-shirts instead of music, he's just found new corporate internetty middle-men such as Spotify that he approves of instead of the old physical media middle-men, but the business go on without least notice of Mike's alleged "new business model" that makes copyright irrelevant. I've got effective counters for every line Mike trots out put into taglines (see below). -- And it's just fun. You kids who snipe with sheer ad-hom as if put me down for once and all, WOW, you're unable to learn even how to argue, let alone substance.Ya say ya can't compete with free, Binky? -- It's easy! Just forget about "sunk (or fixed) costs"!!!http://www.techdirt.com/articles/20070215/002923/saying-you-cant-compete-with-free-is-sayin g-you-cant-compete-period.shtml

Re: Re: Re: You kids are fighting the battles Hollywood wants you to!

I guess it was misguided to point out your folly.

Fair enough - I fail to see how "This comment has been flagged by the community. Click here to show it" has furthered your cause. But if that's the way it works in your head, then so be it. At this point, I just assume it's you and skip over it.

I agree with you 100%, which is why I've taken to reporting everyone who responds to the village idiot. Wanna join in? If there were just a few people who would start doing that I'm confident it wouldn't take long til the responses stopped, at which point ootb would stop getting the "attention" he craves and maybe, just maybe, shut the fuck up.

I'm not full on board. Many times, replies to the trolls are insightful. I do, however, report any replies to the trolls that are, themselves, counter-trolling, insulting, off-topic, etc. As a matter of practice, this tends to be most of the replies.

Re: Re: Re: You kids are fighting the battles Hollywood wants you to!

"You kids who snipe with sheer ad-hom as if put me down for once and all, WOW, you're unable to learn even how to argue, let alone substance."

WOW, very unintelligent of you to say so considering ALL your ad-homs against Mike so its all pots and kettles. You must really be an ad-hom fanboy considering all your ad-homs against Mike that you post which shows how you can't even argue with substance. You keep trying but you keep failing. Hilarious.

Re: Re: You kids are fighting the battles Hollywood wants you to!

What we have here is...failure to communicate, and that's the way he wants it. His butt has been blistered in the past and he can't get beyond it. I agree with what he says every once in a while but the way he couches his arguments just makes it too hard to like him. oh well, he's not that engaging anyway, too bad.

Have you considered...

Have you considered that perhaps piracy is already factored in, and therefor not considered a current situation that will cause more harm than being currently experienced?

The risk is always there, but doesn't have to be restated every time out of the block. It's the same as airlines not noting that "extreme weather events" could hurt their business, because it's a known risk factor. If this was 2001-2003, you might see something about the upswing of piracy in their reports. However, in 2013 (2014), even the Simpsons are doing episodes about piracy. It's simply a known factor.

That the companies don't specifically mention it in their reports isn't an indication that it's a non-issue, just a known issue. That makes this report seem somewhat misleading, don't you think?

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Microsoft

Companies like Microsoft and Adobe make more sense, because they are almost certainly talking about real issues in markets like China and developing nations where piracy is an issue and most people probably aren't using legitimate software, including "official" places like government offices etc.

That's a real issue because developing nations are growth area for software companies, so it would be expected to show up in reports on the company's future like these.

'nuff said

Yet again, it's easier for the industry to blame technology instead of looking at the root causes.Did television kill the movie industry in the 1950's by causing people to stay at home? Of course it did- that's why 2013 and 2012 had the biggest movie revenue ever. Why is this? Did the movie industry kill all the televisions? Did they lock up everyone who watched TV?

And did the movie industry lock up everyone who used a VCR? Okay, they may have tried, but they backed down when they found out how much money they could make by selling movies. Now there's a novel approach: get people to pay #5 to $10 (per person) to see the movie in the theater and then charge them $10 or $20 to own the movie, not to mention the rental agreements with places like Blockbuster or Hollywood Video.

If 2013 was yet another banner year for the movie industry, can they please stop with the "we're getting beaten down by piracy" whining?